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Sri
Lanka
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size and manufacturer and pay in your own currency.
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The
first Sinhalese arrived in Sri Lanka late in the 6th century
B.C. probably from northern India. Buddhism was introduced
in about the mid-third century B.C., and a great civilization
developed at the cities of Anuradhapura (kingdom from
circa 200 B.C. to circa A.D. 1000) and Polonnaruwa (from
about 1070 to 1200). In the 14th century, a south Indian
dynasty established a Tamil kingdom in northern Sri Lanka.
The coastal areas of the island were controlled by the
Portuguese in the 16th century and by the Dutch in the
17th century. The island was ceded to the British in 1796,
became a crown colony in 1802, and was united under British
rule by 1815. As Ceylon, it became independent in 1948;
its name was changed to Sri Lanka in 1972. Tensions between
the Sinhalese majority and Tamil separatists erupted into
war in 1983. Tens of thousands have died in the ethnic
conflict that continues to fester. After two decades of
fighting, the government and Liberation Tigers of Tamil
Eelam (LTTE) formalized a cease-fire in February 2002
with Norway brokering peace negotiations. Violence between
the LTTE and government forces intensified in 2006 and
the government regained control of the Eastern Province
in 2007. In January 2008, the government officially withdrew
from the ceasefire, and by late January 2009, the LTTE
remained in control of a small and shrinking area of Mullaitivu
district in the North.
In 1977, Colombo abandoned statist economic policies and
its import substitution trade policy for more market-oriented
policies, export-oriented trade, and encouragement of
foreign investment. Recent changes in government, however,
have brought some policy reversals. Currently, the ruling
Sri Lanka Freedom Party has a more statist economic approach,
which seeks to reduce poverty by steering investment to
disadvantaged areas, developing small and medium enterprises,
promoting agriculture, and expanding the already enormous
civil service. The government has halted privatizations.
Although suffering a brutal civil war that began in 1983,
Sri Lanka saw GDP growth average 4.5% in the last 10 years
with the exception of a recession in 2001. In late December
2004, a major tsunami took about 31,000 lives, left more
than 6,300 missing and 443,000 displaced, and destroyed
an estimated $1.5 billion worth of property. Government
spending on development and fighting the LTTE drove growth
to about 6% per year in 2006-08, but high government spending
and high oil and commodity prices also pushed inflation
past 20% in 2008. Sri Lanka's most dynamic sectors now
are food processing, textiles and apparel, food and beverages,
port construction, telecommunications, and insurance and
banking. In 2008, plantation crops made up only about
20% of exports (compared with more than 90% in 1970),
while textiles and garments accounted for more than 40%.
About 1.5 million Sri Lankans work abroad, 90% of them
in the Middle East. They send home more than $2.5 billion
a year. The 25-year civil conflict between LTTE and the
government of Sri Lanka has been a serious impediment
to economic activities. By mid February 2009, the LTTE
remained in control of small and shrinking area in the
North. The conflict continues to cast a shadow over the
economy.
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